Question

Marin Inc., a greeting card company, had the following statements prepared as of December 31, 2017 MARIN INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $5,900 $7,000 Accounts receivable 61,500 51,400 Short-term debt investments (available-for-sale) 35,400 17,800 Inventory 39,900 60,400 Prepaid rent 4,900 3,900 Equipment 155,300 131,000 Accumulated depreciation-equipment (34,700 ) (25,200) Copyrights 45,900 49,900 Total assets $314,100 $296,200 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity $46,500 4,100 8,100 8,000 60,600 100,000 30,000 56,800 $314,100 $39,600 5,900 4,100 9,900 68,600 100,000 30,000 38,100 $296,200 MARIN INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense $11,500 Gain on sale of equipment 2,000 Income before tax Income tax expense $335,275 173,900 161,375 121,000 40,375 9,500 30,875 6,175 $24,700 Net income Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense are included in operating expenses. 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2017.

Answer 1

WN 1

Operating expenses	$   121,000
Less: Depreciation expense (34700+(19900*70%)-$25200)	$   (23,430)
Less: Amortization expense ($49900-45900)	$     (4,000)
Less: Increase in salaries and wages payable	$     (4,000)
Add: Increase in prepaid rent	$       1,000
Cash paid for operating expense	$     90,570

MARIN INC
Statement of Cash flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Cash received from customers	$    325,175		335275+51400-61500
Cash paid to suppliers	$ (146,500)		173900+39600-46500+39900-60400
Cash paid for operating expenses (WN 1)	$    (90,570)
Cash paid for interest expense	$    (11,500)
Cash paid for income tax expenses	$       (7,975)		6175+5900-4100
Net cash provided by operating activities		$    68,630
Cash flows from investing activities
Purchase of equipment	$    (44,200)		131000-155300-19900
Cash paid for short term investments	$    (17,600)
Sale of equipment	$         7,970		(19900*30%)+2000
Net cash used by investing activities		$ (53,830)
Cash flows from financing activities
Cash paid for short term loans payable	$       (1,900)
Cash paid for long term loans payable	$       (8,000)
Payment of dividends	$       (6,000)
Net cash used by financing activities		$ (15,900)
Net Decrease in cash		$    (1,100)
Cash and cash equivalents at beginning of period		$       7,000
Cash and cash equivalents at end of period		$       5,900

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